The peroxisome proliferator-activated receptor y (PPAR) regulates adipocyte differentiation and glucose homeostasis and is the molecular target of thiazolidinediones that act as insulin-sensitizers in patients with type 2 diabetes. PPAR? is also expressed in macrophages and negatively regulates the program of macrophage activation by repressing a subset of AP-i and NK-KB-dependent genes. The recent discovery that macrophages accumulate in obese adipose tissue and are a major source of inflammatory mediators that are linked to insulin resistance raises the possibility that the macrophage is a key target of the anti-diabetic actions of TZDs. Consistent with this, selective deletion of the PPAR? gene from macrophages results in mild insulin resistance in lean animals and a more severe degree of insulin resistance in diet-induced obesity. Studies performed in collaboration with the Rosenfeld laboratory have uncovered a mechanistic pathway by which PPAR? inhibits inflammatory gene expression in activated macrophages that involves the nuclear receptor co-repressor, N-CoR. This Project will test the overall hypothesis that adipocyte-macrophage interactions drive inflammatory programs of gene expression that contribute to insulin resistance and that TZDs act as insulin sensitizers in part by counter-regulating these responses in macrophages. Four Specific Aims are proposed: Specific Aim i will define PPAR? and N-CoR-dependent gene networks in macrophages using a combination of gene expression profiling and ChlP-Chip technologies. These studies will test the hypothesis that N-CoR co-repressor complexes are required for PPAR?-mediated repression of broad sets of inflammatory response genes and will complement studies in Project 2 examining glucose homeostasis in mice reconstituted with N-CoR-deficient macrophages. Specific Aim 2 will investigate the basis for insulinresistance in mice selectively lacking PPAR? expression in macrophages. In collaboration with Project i, these studies will evaluate macrophage accumulation and gene expression in adipose tissue, skeletal muscle and livers of wild type mice and mice lacking PPAR? expression in macrophages. Specific Aim 3 will test the hypothesis that PPAR? counter-regulates pro-inflammatory programs of gene expression induced by free fatty acids. This will be accomplished by determining the effects of free fatty acids on macrophage gene expression in control and PPAR?-deficient macrophages and by evaluating the ability of free fatty acids to stimulate the transrepression activities of PPAR?. Specific Aim 4 will utilize selective modulators of PPAR? to test the hypothesis that insulin-sensitizing activities of PPAR? can be achieved through either activation of direct target genes in adipocytes or through transrepression of inflammatory response genes in macrophages. These studies have implications for novel approaches to treatment of obesity-induced diabetes.